True, it's all about product differentiation! These days there are not many choices for HW/SW vendors, it's same parts from same semiconductor companies, same SW/OS from same vendors. It's going pressure on pricing as there are no key differentiating factors across the OEMs. This is where Apple has an Advantage, where there is no comparison and it demands premium for it's products. It takes pains to be another apple, we it may be worth trying with innovative thinking!!

The don't necessarily need to differentiate in the hardware. The fact is that today they buy the app. processor from other manufacturers. All they need is to be able to produce their own so that the situation they have with Samsung will not repeat. If they have such a large market share they must be doing something right, so copying others on the hardware as long as it will be theirs could be OK.

Everything has it's time and season including business strategies. What's old becomes new again. Gotta love this industry because it makes reinventing itself every 10 years a mantra regardless if logical or not.

For smartphones and tablets, I think the space is too crowded to differentiate through hardware. If Lenovo really wants to differentiate software is a better way - especially if they plan to spend as much money as on a hardware design division.
On the other hand, I am wondering if the chip they are planning to make is not based on ARM but rather on china's home grown processors (similar to MIPS). That would be something totally different.

Duh! It's not about mobile. Its about the laptop.
Samsung Exinos chips will take over the laptop this year, with Chrome OS.
A basic laptop that works nicely with your android for $200. Lenovo has to have its own ARM design team to compete.
Vishi

In conjunction with unveiling of EE Times’ Silicon 60 list, journalist & Silicon 60 researcher Peter Clarke hosts a conversation on startups in the electronics industry. One of Silicon Valley's great contributions to the world has been the demonstration of how the application of entrepreneurship and venture capital to electronics and semiconductor hardware can create wealth with developments in semiconductors, displays, design automation, MEMS and across the breadth of hardware developments. But in recent years concerns have been raised that traditional venture capital has turned its back on hardware-related startups in favor of software and Internet applications and services. Panelists from incubators join Peter Clarke in debate.